Spot lithium carbonate prices in China dipped below US$9,500 a tonne in late April, the lowest level since 2020 and roughly 85% off the November 2022 peak. For Australian hard-rock producers, the math has stopped working at several operations, and the conversations I’m hearing from site managers in WA aren’t about expansion anymore. They’re about cash preservation.

The Pilbara spodumene benchmark sits near US$680 a tonne for 6% concentrate. That’s below the all-in sustaining cost for at least three local operations I’ve reviewed, and it’s flirting with the cash cost line for a couple more. Core Lithium’s Finniss mine remains in care and maintenance. Liontown’s Kathleen Valley is producing, but the unit economics there assumed a price floor materially higher than what we’re seeing now.

Why this collapse looks different

The 2023 dip felt cyclical. This one feels structural, at least for the next 18 months. Three things are stacking on top of each other.

First, Chinese lepidolite supply, which everyone wrote off as marginal in 2024, has scaled faster than expected. CATL’s Yichun operations alone are producing volumes that essentially cap any rebound. Second, EV demand growth in Europe has softened with the unwinding of subsidies in Germany and France — the IEA’s April update revised 2026 BEV penetration forecasts down by about 4 percentage points. Third, sodium-ion batteries are starting to take meaningful share in the stationary storage segment, a market everyone was relying on as the demand backstop.

Reuters reported in late April that BYD’s Qinghai brine project is now expected online in Q3 2026, six months earlier than the original schedule. That’s another 30,000 tonnes LCE hitting an already saturated market.

Project pipeline: what’s actually paused

Most ASX-listed lithium juniors with feasibility studies in flight have either deferred final investment decisions or quietly stopped talking about timelines. Wesfarmers and SQM’s Mt Holland operation continues, but the downstream Kwinana refinery commissioning has slipped again. Albemarle’s Kemerton Train 3 is on indefinite hold.

The DFS economics most of these projects rely on assumed long-term spodumene prices of US$1,200–1,500 a tonne. Banks now want sensitivity tables run at US$700, and a lot of NPVs go negative pretty quickly when you do that.

What worries me more is the workforce side. The Pilbara had a rare window where spodumene operations were actively bidding crews away from iron ore. That’s reversed in the past four months. I’ve spoken with two contractors who’ve laid off geotechs and processing engineers — people who’ll move into other commodities or out of mining entirely if the downturn extends.

Refining strategy: harder questions

Australia’s refining ambitions, backed by Critical Minerals Facility loans and the Production Tax Credit confirmed in the 2026 budget, look much less attractive at current prices. Tianqi’s Kwinana plant has been running well below nameplate. The economics of converting spodumene to hydroxide on Australian soil get squeezed when concentrate prices fall — the conversion margin compresses faster than the input cost benefit shows up.

There’s a reasonable argument the federal government should be using this period to lock in offtake agreements with allied buyers, particularly Korean and Japanese cathode makers, while the price is low. The Department of Industry’s Critical Minerals Office published a discussion paper in March suggesting exactly this, but I haven’t seen tangible action follow.

For miners trying to think about technology investment through this period, it’s a mixed picture. Capital projects get cut first, but operational technology that pays back in 18 months or less is still moving forward. Several operators I’ve spoken with are still progressing with predictive maintenance rollouts and processing optimisation work — partly because they have internal teams already committed, and partly because they’re working with external groups like Team400 on custom AI builds for plant-level forecasting where the ROI case holds up even at depressed prices.

What I’d watch over the next six months

The Q2 production reports from Pilbara Minerals, Mineral Resources and IGO will tell us whether anyone is actually willing to curtail production. So far, nobody has blinked meaningfully. That’s the prisoner’s dilemma at work — every producer prefers to keep volume and let the other guy cut. Until someone breaks ranks, the price floor stays where it is.

The other variable is China’s policy response. Beijing has historically intervened when domestic lithium operations bleed too heavily, and the lepidolite cost curve in Jiangxi province isn’t pretty at sub-US$10,000 carbonate. If Chinese authorities mandate production quotas, prices could move quickly. Without that, expect the slow grind to continue.

For investors, the temptation to call the bottom here is dangerous. We’ve seen at least three premature bottom calls in the past 12 months. The fundamentals don’t support a 2026 recovery, and anyone telling you otherwise is selling something.